This course discusses the process of translating financial statements from foreign currency into U.S. dollars. It also covers the accounting and reporting of foreign currency transactions. You'll learn about 1) forward contracts, which are used for hedging or speculative purposes; 2) what's involved in the sale or liquidation of an investment in a foreign entity; and 3) the tax impact related to foreign currency dealings. Footnote disclosures, which are necessary so readers can properly appraise a company's exposure in overseas operations to variability in foreign exchange rates, are also explained.
Upon successful completion of this course, participants will be able to:
- Identify the different risks associated with foreign currency and exchange rates.
- Cite the factors affecting the selection of a company's functional currency.
- Identify how different foreign currency transactions should to be reported.
- Define the terminology used in foreign currency transactions.
- Identify the requirements and objectives for remeasurement and translation.
Table of Contents
Foreign Currency Accounting
The Functional Currency
Foreign Currency Transactions
Current Rate Method
Financial Statement Treatment
Highly Inflationary Environment in Foreign Country
Sale or Liquidation of an Investment in a Foreign Entity
Excluding a Foreign Entity from Financial Statements
Foreign Operations in the United States
Appendix – Annual Report References
Johnson & Johnson
Review Question Answers and Rationales
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